Govt’s approach could lead to a mini-budget and a potential failure to meet the fiscal year revenue target
By M Qadeer
LAHORE: Lahore Chamber of Commerce and Industry (LCCI) President Mian Abuzar Shad has expressed grave concerns over the Federal Board of Revenue’s (FBR) mounting revenue shortfall and its reliance on temporary measures to bridge the gap.
Shad warned that the government’s approach could lead to a mini-budget and a potential failure to meet the fiscal year revenue target.
He highlighted that the FBR had already missed its targets by Rs196 billion during the first four months of 2024-25 and over Rs103 billion in October alone. He fears the shortfall may inflate to an alarming Rs1 trillion by the end of the fiscal year.
“The government appears focused solely on political issues while ignoring the economic challenges, resulting in a cascading revenue crisis,” said Shad. He stressed that instead of harassing the existing taxpayers, the government should utilize the vast potential of the untapped tax base.
“There are over 100 million bank accounts in the country, which remain an underutilized resource for broadening the tax net. The government must take innovative steps to bring these account holders into the tax system,” he declared.
The LCCI chief criticized the short-term revenue measures, such as increasing federal excise duty on sugary drinks and raising withholding taxes on imports and services, as stopgap solutions that fail to address the structural weaknesses in the tax system.
The LCCI president stressed the need for prudent economic policies and highlighted that the government must bring the business community on board to devise sustainable solutions.
“We need comprehensive reforms and collaboration to avoid a mini-budget, which will only burden taxpayers further and stifle economic activity,” he added.
He also said heavy taxation on imports and raw-materials could hinder industrial growth and reduce the competitiveness of local businesses. “Such measures discourage investment and limit economic expansion, which will only exacerbate the revenue shortfall,” he cautioned.
The LCCI urged the government to shift its focus to the economic front and adopt long-term strategies, including broadening the tax base, promoting industrial growth, and incentivizing compliance. “Economic stability is essential to achieving fiscal targets, and for that, the government must prioritize the economy over politics,” Shad concluded.
The business community has called for immediate action to address the growing concerns, warning that continued negligence could push the economy into deeper turmoil.
